79A Procedure for Selection of Developer

In Mumbai, the selection of a developer for a cooperative housing society's redevelopment project is a multi-step process governed largely by the Maharashtra Cooperative Societies Act, 1960 (MCS Act), particularly Section 79A, and the Maharashtra Ownership Flats Act (MOFA), 1963, along with various circulars and guidelines issued by the Maharashtra government. The procedure is designed to ensure transparency, protect the interests of society members, and facilitate a smooth redevelopment.

Here's a brief overview of the typical procedure:

1. Initiation and Consent:

   • A significant percentage of society members (at least 51% as per recent amendments to the MCS Act) must express a desire for redevelopment and pass a resolution in a Special General Body Meeting (SGBM).

   • This SGBM must be convened with proper notice and agenda, outlining the intent for redevelopment.

2. Appointment of Professionals:

   • The society usually appoints a Project Management Consultant (PMC) and a Legal Consultant.

   • The PMC (often a team of architects, civil advisors, and engineers) helps in preparing a detailed feasibility report, technical analysis of developer offers, and overall project guidance.

   • The Legal Consultant ensures all agreements are legally sound and comply with relevant acts like MOFA and RERA.

3. Feasibility Report and Tender Document:

   • The PMC prepares a comprehensive feasibility report, detailing the project's viability, potential FSI (Floor Space Index) utilization, estimated costs, proposed benefits for members (e.g., additional carpet area, corpus fund, rent for temporary accommodation), and project timelines.

   • Based on this, a tender document is prepared, inviting bids from reputed developers. This document outlines the society's requirements, expected benefits, and terms and conditions.

4. Invitation of Tenders/Bids:

   • The society, through its PMC, invites proposals from multiple developers. This is usually done through public notices or by directly approaching reputable developers.

   • Developers submit their offers, detailing their proposed plans, financial capabilities, experience, and the benefits they offer to the society members.

5. Evaluation and Shortlisting:

   • The PMC and the society's redevelopment committee evaluate the received bids based on various criteria, including:

     • Developer's Reputation and Experience: Past project quality, timely completion, and market standing.

     • Financial Stability: Ability to fund the project without delays. A bank guarantee covering a significant portion of the project cost is often required.

     • Proposed Benefits: Carpet area offered, corpus fund, transit rent, amenities, and other perks.

     • Technical Specifications: Quality of construction, design, and adherence to regulations.

     • Legal Compliance: RERA registration and clear titles of previous projects.

   • A few developers are shortlisted for further discussions and presentations.

6. Final Selection and General Body Approval:

   • The shortlisted developers present their final offers to the society members.

   • Another SGBM is convened, where the members vote to select the preferred developer. This decision typically requires the approval of a majority of the members (often 51% or more, as per society bye-laws and government directives).

   • The entire proceedings of this meeting are often video-recorded to maintain transparency.

7. Execution of Development Agreement:

   • Once a developer is selected, a legally binding Development Agreement is executed between the Cooperative Housing Society and the chosen developer.

   • This agreement, drafted with the legal consultant's assistance, meticulously details all aspects of the redevelopment, including project timelines, construction specifications, area allocation, corpus fund, transit accommodation, penalties for delays, and other terms and conditions.

   • Individual MOFA agreements are also signed between the developer and each society member.

8. Regulatory Approvals:

   • The selected developer is responsible for obtaining all necessary regulatory approvals from the municipal authorities (like BMC), including Intimation of Disapproval (IOD), Commencement Certificate (CC), and later the Occupation Certificate (OC) and Building Completion Certificate (BCC).

   • The project must also be registered under the Real Estate (Regulation and Development) Act (RERA).

This structured approach, mandated by Section 79A of the MCS Act and related guidelines, aims to ensure that the redevelopment process is transparent, fair, and ultimately beneficial for the cooperative housing society members in Mumbai.

SHRINIVAS NADGAUDA

Vayuputra Builders and Infrastructures Pvt Limited.